"The United States is not going to get hyperinflation unless Congress
nationalizes the Federal Reserve System.

It will get mass inflation at some point: anywhere from 15% per annum
to 30%. But it is not going to get 50% or 100% or more.

Why not?

The temporary nature of the payoff

The fear of getting blamed

The boom-bust cycle

While he makes good points for each, we take exception based on historical
precedent, common sense and factual data.

1. The Temporary Nature of the Payoff

Gary North states:

"Hyperinflation lasts only a few years. People in the hard-money camp
ought to know this, but they tend to forget.

Those economic forecasters who keep telling us the dollar will fall to
zero forget the obvious: big banks are creditors. Bankers lose when a currency
falls to zero."

And, yes, that is correct. The bankers (who are all artificial, non-free market
entities in this non-free market financial system) would lose everything if
the currency goes to zero.

However, that has never stopped them before. In fact, during many of the hyperinflations
of our time, including Weimar and the ongoing hyperinflation in Argentina,
the last people to see the causes of the hyperinflation (money printing) are
the central bankers and the economists of the banks.

Remember, they've all been brainwashed with modern day Keynesian economics,
which is witchcraft and delusionary. They actually believe that inflation is
caused by prosperity... and not money printing. That's why the following quotes
were made during the Weimar Republic hyperinflation after they had already
had thousands of percent gains in prices:

And, even when the US dollar goes to zero, it does not mean the banks are
out of luck. Not if they were like the French banks in the beginning of the
20th century. In a book published in 1912, called "Fiat Money Inflation in
France", Andrew White recounts how the government changed the rules and stated
that all debts increased along with the issuance of further currency, so that
for every so many additional assignats printed, one's debts increased by 25%.

The US Government owns all the guns. It would not be beyond them to state
that all debts held in dollars are now held in the New Dollar. Or, what they
will likely name, the "Patriot dollar".

2. The Fear of Getting Blamed

Here, Gary North states that thanks to the internet and Ron Paul, too many
people understand what the Federal Reserve does and they won't allow them to
go into hyperinflation.

He makes a good point here that the public is more aware than ever about the
Federal Reserve criminal enterprise.

However, in order for Ben Bernanke to stop he would have to admit that everything
he has focused on for his entire life and achieved has all been a lie. Not
many people have this kind of ability to admit complete error in their ways
after having their entire persona based on the false information.

Plus, the entire US media propaganda organization stands as ready and willing
as ever to back the Federal Reserve until its dying days. Paul Krugman at the
New York Times has been wrong for years and years about absolutely everything
yet he is still thought of by many people as being a "smart" economist - despite
his calling for a housing bubble after the tech bubble and now having resorted
to stating that the best way to get the American economy on track is through
a massive, fake alien invasion.

Remember, that almost every US economics PhD, every major economist at most
banks and people like Bernanke and Krugman will all have to admit they were
all fools in order for them to stop with their Keynesian witchcraft. Most white,
older men who look in the mirror and see they are monsters rarely admit their
flaws... they tend to take us all down into hell with them rather than, as
the Japanese say, "lose face".

In Japan, at least, when a finance minister realizes his policies haven't
worked he usually kills himself. We can only hope for the same from Krugman
and Bernanke.

3. The Boom-Bust Cycle

Here, Gary North states that because of the boom-bust cycle, the US will be
forced to stop printing money before entering hyperinflation. As example, he
states how Volcker was forced by rapidly rising prices to slow money printing
and allow T-Bill rates to rise to 22% to stop the inflation.

There is only one problem with this. The US Government debt in 1979 was hardly
anything as it had only been 8 years since Nixon delinked the dollar from gold.
Today, however, the US Government (and most western governments, ask Greece)
have had plenty of time to build up mountains of debt.

Today, as
we showed here, an interest rate of only 11.1% will effectively take
all real income of the US Government just to pay for the interest alone.

In other words, raising the interest rates to even 11% this time around will
destroy the US Government.

That's why Paul Volcker, who was on a "panel of experts" advising Barack Obama
already quit and left town on January 5th of this year. He took out his calculator,
punched in a few numbers, looked around and decided it was time to retire.

Greenspan left on similar premises right before his housing bubble burst.

CONCLUSION

Gary North makes some good arguments. And he very well could be right. But
historical evidence, common sense and the amount of current US debt makes stopping
this train towards hyperinflation a lot tougher job than it looks.

We aren't counting on it. Even if all we have is "mass inflation" our portfolios,
heavily laden with gold and gold stocks will do very well. If we do get US
hyperinflation, many dollar vigilantes are also prepared for that as well,
having left or in the process of moving assets outside of the US, getting a
second passport (like
here in the Dominican Republic) or expatriating outside of the western
world.

Hyperinflation isn't fun. And we aren't as convinced as Gary North that it
is so impossible.

Anarcho-Capitalist. Libertarian. Freedom fighter against mankind's two biggest
enemies, the State and the Central Banks. Jeff Berwick is the founder of The
Dollar Vigilante, CEO of TDV Media & Services and
host of the popular video podcast, Anarchast.
Jeff is a prominent speaker at many of the world's freedom, investment and
gold conferences as well as regularly in the media including CNBC, CNN and
Fox Business.

Jeff's background in the financial markets dates back to his founding of Canada's
largest financial website, Stockhouse.com, in 1994. In the late '90s the company
expanded worldwide into 8 different countries and had 250 employees and a
market capitalization of $240 million USD at the peak of the "tech bubble".
To this day more than a million investors use Stockhouse.com for investment
information every month.

Jeff was the CEO from 1994 until 2002 when he sold the company and still continued
on as a director afterwards until 2007. Afterwards, Berwick went forth to
live on and travel the world by sailboat but after one year of sailing his
boat sank in a storm off the coast of El Salvador. After being saved clinging
to his surfboard with nothing but a pair of surfing shorts left of all his
material possessions he decided to "live nowhere" and travel the world as
spontaneously as possible with one overarching goal: See and understand the
world with his own eyes, not through the lens of the media.

He went on to visit nearly 100 countries over four years and did and saw things
that no education could ever teach. He met and spoke with a plethora of amazing
people, from self-made billionaires to some of the brightest minds in finance
- as well as entrepreneurs from a broad range of backgrounds and locations
from tech companies in southern China to resource developers in Mongolia,
Thailand, Russia and Chile. He also read everything he could find on how the
world really works... politically and financially. A pursuit he continues
to this day.

He expatriated, long ago from his country of birth, Canada, and considers
himself a citizen of the world. He has lived in numerous locales since including
Los Angeles, Hong Kong, Bangkok and currently lives in Acapulco, Mexico and
is building a home in Cafayate, Argentina. In essence, everything he writes
about here for TDV he has done or is doing.

As well, during his travels, both real and virtual (through the internet),
he met some amazing people who have a similar shared vision of what is currently
going on in the world and enticed them to come aboard TDV and provide their
own brand of analysis.